Analysis by Energy Workforce President Tim Tarpley
Congress came back into session this week after a two-week district work period. Most relevant to us on the docket is the potential for Speaker Johnson to shore up Republican support for a large Ukraine, Israel, and Baltimore bridge funding package; he has been floating the possibility of including language to end the pause. Despite attempts by the White House to push back on any such possibility, it still appears to be one of the options under consideration. Rep. Marc Veasey, a Texas democrat member of the House, expressed that he would support the inclusion of such a provision, but he was unsure if that would be enough to get the package through the House as it may lose some Democrats who otherwise would have supported along the way.
House Republican leaders have pushed back aggressively against the pause, and the Energy and Commerce Committee held a field hearing on Monday to hear from local officials and business leaders about the value of the LNG industry. Johnson must balance the need to pass the funding package out of the House with his own political survival. Rep. Green has vowed that she will move to vacate the speaker if he were to pass a Ukraine funding package with Democrat support. Likely, if she moves forward with such a strategy, Speaker Johnson will have to rely on some number of Democrats to cross over and support him in order to keep his job. The caucus has been mum on whether or not they would make such a move; however likely, it would only need to be 2-3 members, which seems quite doable. Another option would be for Speaker Johnson to rely on Democrat support to pass a rule to change the threshold of what number of members need to support a motion to vacate above the current one threshold. This may be a politically easier move for many Democrats to support as they would not actually be casting a vote to support a Republican speaker. At the time of writing, all options were still on the table.
Permitting Reform Still a (slim) Possibility
While hope seems to be fading for this Congress, permitting reform is still a possibility this year. Senate Energy and Natural Resources Chair Joe Manchin will continue talks in the coming weeks with his John Barrasso with the goal of having a draft bipartisan product by spring or summer. The package is expected to be a balance of support for grid build-out along with an easing of laws like the NEPA, ESA and Clean Water Act to allow for faster infrastructure build-out. While conventional wisdom would be that such a package would be too politically difficult to pass in such a divided Congress right before a major Presidential election, it is not off the table. Perhaps if a bipartisan coalition is successfully formed to pass the supplemental funding package, then a similar coalition may be possible to push permitting reform over the edge.
SEC Announces Stay on Climate Rule
Following a consolidation of multiple lawsuits led by nearly every Republican state in the Union with some fossil fuel interests into the 8th circuit federal appeals court in Missouri the SEC has chosen to pause the implementation of the new climate rule. The SEC argues that this pause is due to the “procedural complexities” of the multiple lawsuits that have been filed and consolidated. While at the same time the SEC also stated that it would “continue vigorously defending the final rules’ validity in court and looks forward to expeditious resolution of the litigation.”
What should we read from this move by the SEC? It is not without historical precedent for an agency to voluntarily pause a rule to deal with litigation on it and this litigation was not entirely unexpected, however, given the long delay in releasing the rule in the first place, the scaled-back nature of the rule that was ultimately released, and the favorable rulings we have seen so far it would not be unreasonable to think that there is at least a 50/50 chance that the rule does not survive at least in its current form. However, this does not necessarily mean that companies should pause their implementation of climate disclosures. The California rule has a very strong chance of being fully implemented and investors and customers will likely continue to demand increased information on climate regardless of what the ultimate future of the SEC rule ends up being.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
